Story by
Clint Kelly

Photos by
John Bauguess

The four Seattle Pacific history majors who founded CBSI (left to right): John Kenagy, Steve Kenagy, Wes Lockard and Jerome Kenagy. The SPU family ties don't stop there: Three of their wives and three of their children are also graduates of SPU. One child is a current student and another has been accepted for enrollment next fall.

In 20 years, the commercial fishery around Reedsport, Oregon, has all but vanished. In the nearby coastal forests that once supported a thriving timber industry, little logging remains. The area's last paper mill shut down in December, eliminating 275 jobs. Local unemployment runs at 20 percent.

Today, the biggest private employer left in the town of 5,000 is CBSI - Custom Business Systems Inc. The world's largest supplier of business software for the radio broadcast industry, CBSI was established by Seattle Pacific College graduates Wes Lockard '72 and the Kenagy brothers, Jerome '56, Stephen '64 and John '73. With degrees in history, the four built an international company of nearly 3,000 clients in 27 nations by keeping their options open and believing that faith, family and ethical standards form the backbone of business success.

At Homecoming in January, the leaders of CBSI were honored with Medallion Awards from the SPU Alumni Association. The presentation was made for exceptional service to their profession, community and church.

CBSI President Jerome Kenagy, not unlike his partners, completed Seattle Pacific without having formed a clear plan for what to do next. "But in another sense, everything that happened at Seattle Pacific was preparation for CBSI," he says. "I was exposed to a caring, vibrant, living community. I saw underpaid faculty and administrators who lived for Christ yet were real human beings. Friendships formed that were lifelong."

The partners of CBSI have patterned their enterprise after that kind of nurturing community.

Following graduation and five years of work in the Seattle Pacific Alumni Office, Jerome went to the University of Oregon to begin a master's degree program in journalism. Soon after he heard from fellow alumnus Wes Morgan '56 that a small radio station on the coast was for sale. Cheap.

Though Jerome had no money, he had spirit. Intrigued, he called brother Steve, who was working in marketing and sales in Seattle but interested in moving to Oregon to co-own a business. They managed to borrow the $5,000 down payment, fully confident they were on their way to radio riches.

But the only payoff they realized for years was a wealth of struggle. Whoever said KDUN was a small market radio station wasn't kidding. Their 5,000 watts of daytime power barely reached 9,000 listeners.

In 1973, along came what Jerome and Steve believe was a providential turning point in the company's evolution. Bill Hansen, a classmate of Jerome's who became a Seattle Pacific professor of communication and advisor to campus radio station KSSR, urged his former station manager and recent graduate Wes Lockard to seek a job at KDUN.

The very day Lockard called, KDUN's chief engineer had quit. Lockard was hired and soon was directing music, overseeing commercials and running the control board. At night, he taught himself to write software and program the computer at the station. He created a computerized radio program log that saved significant time and reduced scheduling errors.

Word got around and soon the guys at KDUN were producing quality software for other stations and building a reputation for confidentiality, fair dealing and reasonable prices. In 1978, they sold their first software products and CBSI was born. By 1985, they'd sold the radio station.

Today, Lockard is in charge of product development. "You learn to survive by your wits," he believes. "Though we went in with a huge inferiority complex, slowly the revelation came that what we were producing was as good as, and in some cases much better than, the high-priced commercial stuff. We were real and took off like a shot!"

Since then, most of the early competitors are gone, and CBSI is recognized as the industry leader in their market.

The head of marketing and sales at CBSI, Steve has helped engineer a nearly 20 percent share of the highly competitive US market in radio traffic and billing software. This includes specialized program automation and CBSI's latest offering: digital audio for the broadcast quality of a CD.

"Customer service shows our true caliber," says Steve. "It's a work ethic we learned at home and that was reinforced at Seattle Pacific. We ask ourselves what would Christ want us to do."

"We don't ask ourselves what is the best thing for the company, but what is the right thing to do," echoes John Kenagy, vice president of administration and finance, who joined CBSI in 1976. "Some would say that we're naive to work that way. But we're interested in the honorable thing."

That difference extends to the entire seaside community where the four co-owners of CBSI and their families are active in the Reedsport Church of God. They've resisted relocating the business to an urban center because the quality of small-town life on the ocean has its advantages, plus they employ more than 90 Reedsport-area residents.

"I've sat on the town's economic development committee and I know the local impact if CBSI were to move out," says Steve. Over the years, through good times and lean, he and his partners have consistently put the needs of the customer and the community ahead of their own.

It's company policy.

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